Billionaire investor Carl Icahn is reportedly mulling a proxy fight to oust Yahoo's board of directors, according to CNBC.

Icahn could not be reached for comment, and a Yahoo spokesperson declined comment.

But people familiar with the matter told CNBC that late last week Icahn began amassing as many as 50 million shares in anticipation of putting up a slate of directors to run against the current board. Yahoo shareholders have until the end of business Thursday to submit an alternate slate of directors. Yahoo's annual meeting will be held July 3.

Earlier this month, Microsoft withdrew its bid to buy Yahoo because the Internet company was demanding a price the software company was unwilling to pay. Yahoo angered many shareholders who claimed the company was not representing their interests and not negotiating in good faith with Microsoft.

According to CNBC, Icahn hasn't been able to get a confirmation from Microsoft that it would be willing to continue negotiations if any or all of Yahoo's board was replaced. However, that might not stop him from launching a proxy fight, CNBC said.

While Icahn might be gearing up for a fight, Yahoo shareholder Eric Jackson, president of Ironfire Capital, has abandoned his bid to replace Yahoo's current board.

Jackson said his advisers cautioned that launching a proxy fight could cost as much as US$1 million in legal expenses, proxy solicitor and mailing costs. He said he decided to give up his effort when he was unable to persuade other shareholders to back him in a proxy fight.

However, Jackson said he's going to launch a "vote no" campaign to persuade shareholders to vote against some of Yahoo's current board members and replace them with new members who are more friendly to the views of Yahoo shareholders.